3. Journal Entries of Job Order Costing Virus Cakes makes cakes and desserts for all festive occasions. The company uses a job order costing system to allocate manufacturing overhead costs to jobs on the basis of direct labor hours. The company's wages are unusually high as it employs highly skilled pastry chefs in making desserts and pays its chefs $25 per hour. The company anticipates overhead costs for the upcoming year to be $149,600 and expects to see its pastry chefs work for a combined total of 16,000 hours. The following transactions occurred during the year: a.) Purchased $250,000 of direct materials on account b.) Purchased $10,000 of cleaning supplies on account c.) Requisitioned $240,000 of direct materials and $9,500 of supplies for use in production d.) Incurred employee costs: Direct labor (18,000 hrs) $450,000 Indirect labor 50,000 iii. Administrative salaries 200,000 iv. Sales wages 80,000 e.) Advertising: (paid in cash) $3,000 f.) Property taxes: $8,000. 10% of the space related to sales offices, 90% was the kitchen g.) Depreciation: $55,000. 80% relates to kitchen equipment, 20% relates to office equipment h.) Insurance expired: $15,000. 90% relates to the kitchen, the remainder relates to insurance on the office equipment. This had been a policy paid for last year. i.) Manufacturing overhead costs were applied to production j.) Desserts costing $790,000 were completed k.) The company had sales on account of $1,800,000. According to cost data, the jobs cost $720,000 Required: (25 pts) a.) For items a.)-k.) above, record journal entries. Unless otherwise noted, assume all transactions were on account. b.) Was overhead overapplied or underapplied for the period? By how much? c.) Record a journal entry to close overhead to cost of goods sold. d.) Based on the information above, prepare an income statement for the company